Chapter

Relationships and Contracts

John Kay

in Foundations of Corporate Success

Published in print April 1995 | ISBN: 9780198289883
Published online November 2003 | e-ISBN: 9780191718205 | DOI: http://dx.doi.org/10.1093/019828988X.003.0004
 Relationships and Contracts

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Following an understanding of the relationships that form a firm, two main types of commercial relationships are recognized. Spot contracts refer to agreements for immediate exchanges, whereas relational contracts occur in cases in which the companies involved face a ‘repeated game’. The appropriateness of each depends on the specific circumstances of the exchange.

Keywords: cooperation; firm; implicit contract; opportunism; relational contract; relationships; repeated game; spot contract; strategy

Chapter.  4586 words.  Illustrated.

Subjects: Microeconomics

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